The Best Penny Stocks to Watch in April
Dear Penny Stock Millionaire,
The global economy is radically shifting due to the COVID-19 pandemic. Entire countries are on lockdown or shelter-in-place orders. Very few people are leaving their homes. So for April 2020, I’m focusing on stocks positioned to prosper in these times of societal isolation.
The first three months of the year I was laser-focused on biotech stocks. The last few months a large portion of my watchlist was dedicated to coronavirus biotech plays.
While I don’t think these plays are over… they’ve become a lot more crowded.
Crowded stocks = choppy stocks and I hate choppy stocks.
One lesson I’ve learned from trading over the last 20 years is to always look ahead. Once the crowd catches up with my thought process, I like to move on to greener pastures.
The COVID-19 pandemic is dramatically changing the world and economy. If you think everything will just go back to normal when this is over, you’re sadly mistaken. Corporate jobs, higher education, entertainment, and restaurants will never be the same. We’re in the middle of a huge economic shift that will last for decades.
I’ve hunted down my favorite penny stocks positioned to outperform in this coronavirus economy.
Before I get to the list of top penny stocks to watch in April 2020…
How to Use This List
Keep in mind that my strategies involve trading some of the fastest moving, most volatile stocks in the entire market. That said, some of the stocks on this list could be completely out of play by the time you read this. (Yes, even after only one day, stocks sometimes leave my list.)
The point is… don’t use this list as a signal to buy any stock. I don’t put stocks on my watchlist based on fundamentals. It’s not that I don’t look at fundamentals. But I’m not gonna lie to you. (Like so many other ‘top penny stocks to watch’ articles.) I won’t tell you to buy and hold a stock because “the market is undervaluing this stock.”
Frankly, that kind of thinking with penny stocks is total BS. Most penny stocks fail. Just like most traders — roughly 90% — lose. So use this list — and each of my penny stocks to watch lists — as a tool for learning to create your own watchlist.
That said, let’s get on with…
Top 5 Penny Stocks to Watch April 2020
Before you read the list of penny stocks to watch in April…
[Disclosure: Some of the stocks mentioned below have been traded or otherwise discussed by Tim Sykes as part of his daily watchlist. Tim Sykes may or may not hold open positions on these stocks at any given time. This list is not a recommendation to buy or sell any stock. Do your due diligence. Full earnings claim disclosure here.]
Now for the list of top penny stocks to watch in April 2020.
Blue Apron Holdings, Inc. (NYSE: APRN)
Blue Apron Holdings is a direct-to-consumer e-commerce platform that delivers original recipes, and fresh, seasonal ingredients to consumers. The company also sells cooking tools and has a wine delivery service.
APRN got crushed after its June 2017 IPO. The stock started trading around $10 a share but faded quickly to under $1. The company was forced to do a reverse stock split in June 2019 to keep its NYSE listing.
Despite the company’s poor stock performance, its direct-to-consumer model is ideal during a time of national self-isolation.
Starting on March 16, APRN spiked for four straight days on speculation that restaurant closures could greatly benefit food-delivery stocks. Multiple news outlets picked up on the story, including Bloomberg, Zacks, and TechCrunch.
The publicity spiked APRN from a low of $2.25 to a high of $28.84 in just four trading days.
APRN chart: 1-year, 1-day candle
With a significantly reduced float, APRN went full supernova.
For nearly two weeks, APRN has held a large portion of its gains. I’m very interested if the company has a new press release about its operations.
APRN chart: 10-days, 15-minute candle
Under no circumstances will I ever buy a stock anticipating news. I want to see the stock spike first. Then I’d look to join during dips.
APRN is now a former supernova and still fresh in every trader’s mind. The stock could go another leg higher with the right catalyst.
Waitr Holdings Inc. (NASDAQ: WTRH)
Waitr Holdings is also in the on-demand food-delivery business. The company is based in Louisiana and primarily caters to smaller, underserved U.S. markets. Through its network of restaurants and drivers, Waitr Holdings can deliver food to customers in 250 cities.
WTRH chart: 1-year, 1-day candle — courtesy of StocksToTrade.com
WTRH began its run on the same day as APRN… but it had a slightly stronger catalyst. On March 16, Waitr Holdings released its fourth-quarter earnings report. In the report, the company addressed concerns about the coronavirus outbreak and its plans to achieve long-term growth.
The next day, WTRH reaffirmed its commitment to continue to deliver food to local communities.
WTRH chart: 10-days, 15-minute candle
My plan for WTRH is the same as APRN. These stocks often move together in sympathy. If one starts running on a press release, the other can quickly follow.
Again, it’s not about predicting a press release or catalyst. Let the price action come to you. It’s possible neither company will release news. Nothing is guaranteed in the stock market.
CytoDyn Inc. (OTC: CYDY)
CytoDyn is a late-stage biotech company. It studies humanized monoclonal antibodies to treat human immunodeficiency virus (HIV) infections. The company has pivoted its main drug leronlimab to treat patients with mild to moderate coronavirus symptoms.
CytoDyn began trials of its drug for coronavirus patients on March 16, but the stock didn’t spike on the initial news. The drug showed promise in initial trials leading the FDA to approve of two emergency cases where patients in New York received leronlimab.
By March 23, four patients had received the drug and doctors provided statements on its effectiveness…
But CytoDyn stock didn’t begin to run until March 27 when three more patients joined the trial.
CYDY chart: 6-month, 1-day candle — courtesy of StocksToTrade.com
CYDY closed strong on Friday, March 27. Then news spread over the weekend, which led to a huge gap up and morning spike. CYDY opened March 27 at $1.03 and hit a high of $3.50 Monday morning.
I haven’t seen OTC action like this since Tim Grittani nailed Fannie Mae (OTCQB: FNMA) five years ago.
CYDY chart: 5-days, 15-minute candle
CYDY even made it on Tucker Carlson’s nightly show with Fox News. Watch the full segment here.
My favorite play on OTC stocks is dip buying the morning panic. Level 2 on OTC stocks is much easier to read than listed stocks. If we get any large morning dips (greater than 20%), I may look to buy. It’ll depend on how weak the stock is trading.
Tilray, Inc. (NASDAQ: TLRY)
Tilray is in the research, cultivation, processing, and distribution of medical cannabis. During the 2018 weed boom, TLRY was the sector leader. The company had its IPO around $18 a share and made its way to a high of $300 in a few months.
Since 2018, the cannabis hype subsided … and TLRY faded all the way to a low of $2.43.
The entire weed sector got crushed over the last year — but it could provide a great bounce opportunity.
That doesn’t mean you should blindly buy any stock that’s down 50% or more.
Do your research. Some companies have negative catalysts and are down for good reasons.
TLRY chart: 2-years, 1-day candle
TLRY and the weed sector actually had a good catalyst once the COVID-19 pandemic forced a nationwide shelter in place. Many dispensaries reported record sales as people stocked up on cannabis for self-isolation.
Tilray stock hit a high of $10.60 on March 27. The stock had an impressive rebound from $2.43 to $10.60 in only seven trading days. To date, TLRY hasn’t released an official statement about its sales.
TLRY chart: 10-days, 15-minute candle
Similar to the explosive move biotechs had this year, the weed sector could see a nice recovery. I’m excited to see what these stocks do in April.
The Bottom Line
Your goal as a trader is to become self-sufficient. And my goal is to be the mentor to you that I never had. So I hope you’ll take this list of the best penny stocks to watch in April 2020 and use it as a learning tool.
Editor, Penny Stock Millionaires